Shakeout
From Wikipedia, the free encyclopedia
Shakeout is a term used in business and economics to describe two things:
A shakeout refers to a period in which rapid growth and overexpansion in an industry is followed by consolidation.[1][2] When this happens, stronger companies use their capital reserves to acquire or eliminate weaker companies that have overextended themselves.[1] Large, diversified companies that are able to endure a weak business climate benefit from shakeouts.[2]
A shakeout also refers to a situation in which many investors exit their positions, often at a loss, due to uncertainty in the market or bad news circulating around a particular security or industry. This type of shakeout is also known as a market selloff or market correction.[1] A shakeout of investors and internet businesses occurred during the dot-com bubble.[1]
